Listing on the Hong Kong Stock Exchange: An IPO Guide for Companies and Their Advisers

Introduction: Why List on HKEX?

The Hong Kong Stock Exchange (HKEX) is one of the world's premier equity capital markets venues, consistently ranking among the top five exchanges globally by IPO proceeds. It offers companies — particularly those with a China nexus — access to a deep pool of institutional and retail capital, a highly liquid secondary market, and the prestige and credibility of a world-class regulated listing.

For Chinese companies seeking international capital, HKEX has historically been the venue of choice: it provides access to global investors while maintaining proximity to mainland China operations and supply chains. For international companies seeking exposure to Asian investors and the ability to tap Greater China capital, HKEX offers a compelling alternative to the New York Stock Exchange or Nasdaq.

HKEX has also been at the forefront of capital market innovation: the introduction of the weighted voting rights (WVR) framework for technology companies (2018), the secondary listing regime for companies with a primary overseas listing (2018 and enhanced in 2021), the pre-revenue biotech listing chapter (2018), and the specialist technology company chapter Chapter 18C (2023) have collectively attracted a diverse and growing range of issuers.

Main Board vs. GEM

Main Board

The Main Board is the primary listing venue for established companies meeting HKEX's financial eligibility criteria. There are three financial tests for Main Board listing, and companies must satisfy at least one:

• Profit test: Profit attributable to shareholders of at least HK$35 million in the most recent financial year, and aggregate profit of at least HK$45 million over the three most recent financial years.
• Market capitalisation / revenue / cashflow test: Expected market capitalisation at listing of at least HK$2 billion, revenue of at least HK$500 million in the most recent audited financial year, and positive operating cashflow of at least HK$100 million in aggregate over the three most recent financial years.
• Market capitalisation / revenue test: Expected market capitalisation at listing of at least HK$4 billion, and revenue of at least HK$500 million in the most recent audited financial year.

Additional requirements include: a trading record of at least three financial years; management continuity throughout the trading record period; a minimum public float of 25% (or 15% for issuers with market capitalisation over HK$10 billion); and at least 300 shareholders at listing.

GEM (Growth Enterprise Market)

GEM is designed for companies at an earlier stage of development that do not yet meet Main Board financial criteria. Key eligibility requirements include: positive cashflow from operations of at least HK$30 million in aggregate over the two most recent financial years; expected market capitalisation at listing of at least HK$150 million; and a public float of at least 25% and at least 100 shareholders at listing.

GEM has historically been a stepping stone to Main Board listing, with many GEM companies transferring to the Main Board as they grow. However, GEM's liquidity is significantly lower than the Main Board, and GEM listings attract a smaller institutional investor base.

Specialist Regimes

For companies that do not satisfy the standard financial tests, HKEX offers specialist listing chapters:

• Chapter 18A (Pre-revenue Biotech): For biotech companies with at least one product in Phase II clinical trials or beyond, a minimum market capitalisation of HK$1.5 billion, and investment from at least one Sophisticated Investor of at least HK$150 million.
• Chapter 18C (Specialist Technology): Introduced in 2023, for technology companies in five identified sectors (next-generation information technology, advanced hardware, advanced materials, new energy and environmental protection, and new food and agricultural technologies) that may not yet be profitable but have substantial revenue or are pre-commercialisation stage.

The Role of the Sponsor

Every company seeking a listing on HKEX must appoint at least one sponsor — an SFC-licensed firm (typically an investment bank) holding a Type 6 licence (advising on corporate finance). The sponsor owes a paramount duty to the investing public and is responsible for:

• Conducting thorough due diligence on the company and its business
• Ensuring the company satisfies all applicable listing requirements
• Supervising the preparation of the prospectus and ensuring its accuracy, completeness, and non-misleading nature
• Submitting the listing application to HKEX and liaising with HKEX and the SFC throughout the application process
• Making representations to HKEX and the SFC about the company's suitability for listing

The sponsor's liability exposure is significant: sponsors have faced regulatory action and substantial fines for failures in due diligence or in ensuring the accuracy of listing documents. Choosing an experienced, reputable sponsor is one of the most important decisions a listing candidate makes.

The Prospectus

The listing prospectus is the primary disclosure document for an IPO. Under the Companies (Winding Up and Miscellaneous Provisions) Ordinance, a prospectus must be registered with the Companies Registry before being issued to the public. It must contain all information that investors and their professional advisers would reasonably require to make an informed assessment of the issuer's business, financial position, and prospects.

A typical HKEX prospectus includes: a summary of the offering and use of proceeds; risk factors; industry overview; regulatory overview (particularly for companies in regulated sectors or with PRC operations); business overview; financial information (audited accounts for three financial years); management discussion and analysis; directors and senior management; major shareholders; connected transactions; and details of the offering structure.

The prospectus undergoes multiple rounds of review by HKEX (and the SFC, for companies with market capitalisation above certain thresholds). HKEX and the SFC issue written comments, and the sponsor and issuer's counsel must respond comprehensively to each round of comments. This process — known as the “vetting” process — can involve five or more rounds of queries and is the most time-consuming part of the listing process.

The IPO Timetable

A typical HKEX Main Board IPO takes 12–18 months from kick-off to listing. Key milestones:

• Kick-off and organisational meeting: Appointment of sponsor, legal advisers, auditors, and other advisers; distribution of responsibilities and timetable.
• Due diligence and documentation: Approximately 4–6 months of due diligence, financial audit, and drafting of the listing application and prospectus.
• A1 filing: Submission of the initial listing application (Form A1) to HKEX, commencing the vetting process. The A1 filing is publicly available on HKEX's website.
• HKEX vetting: HKEX reviews the application and issues comment letters; the sponsor and issuer respond. Typically three to five rounds over 4–6 months.
• Listing hearing: HKEX's Listing Committee considers the application and grants or refuses approval.
• Roadshow and pricing: The issuer conducts a roadshow (typically 1–2 weeks) to market the IPO to institutional investors. The offering price is set on the day of pricing.
• Listing and trading commencement: Typically 3–4 business days after pricing.

Post-Listing Obligations

Once listed, an issuer is subject to ongoing obligations under the HKEX Listing Rules and, in the case of companies with securities listed on the Main Board, the SFC's Market Misconduct provisions. Key obligations include:

• Continuing disclosure: Prompt disclosure of inside information (information reasonably expected to have a material price impact) via HKEX's HKExnews platform.
• Financial reporting: Annual results within three months of the financial year end; interim results within two months of the interim period end.
• Corporate governance: Compliance with the Corporate Governance Code; annual corporate governance report.
• Connected transactions: Prior approval (and in some cases, shareholder approval) for transactions with connected persons above specified thresholds.
• Notifiable transactions: Disclosure of, and in some cases shareholder approval for, major transactions, discloseable transactions, and very substantial acquisitions or disposals.
• Insider dealing prevention: Maintenance of a list of insiders; compliance with the Model Code for Securities Transactions by Directors.

Recent Developments

HKEX's competitiveness as a listing venue has been strengthened by several recent reforms. The GEM reform (2024) simplified GEM listing requirements and introduced a streamlined GEM-to-Main Board transfer process. The HKEX Dual Primary Listing regime allows companies with primary listings overseas (e.g., NYSE or Nasdaq) to seek a primary (not merely secondary) listing in Hong Kong, broadening the potential issuer base. The Chapter 18C specialist technology regime has attracted a number of technology unicorns previously deterred by the profitability requirements.

Conclusion

A HKEX listing is a transformative event for any company — providing access to capital, liquidity for shareholders, and the profile and credibility of a public company. It is also a complex, demanding, and costly process that requires careful preparation and a strong team of advisers. Early engagement with experienced legal counsel — alongside a reputable sponsor and auditors — is the single most important factor in a smooth and successful listing.

Alan Wong LLP advises issuers, sponsors, and investors on HKEX listings, IPO documentation, and post-listing compliance in Hong Kong. Contact our Corporate & Commercial team to discuss your listing plans.